Cross-border Demand for High-end Products Soars 50%
In eShopWorld’s latest cross-border report, data shows the demand for luxury jumped 50 percent this year, making luxury purchases “the fastest-growing cross-border category over the past six months.”
By market, China, South Korea, India and the UAE saw the strongest demand. The data also found that 43 percent of cross-border shoppers “are happy to forgo the in-store luxury experience for online convenience.”
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The data was culled from a survey of about 15,000 shoppers across 14 countries.
Martim Avillez Oliveira, chief commercial officer of the EMEA and APAC at ESW, said the “quality, craftsmanship and prestige of luxury products is in increasing demand from a growing digitally native middle class, living outside the traditional luxury markets, who are both brand and status hungry.”
“Therefore, to capitalize, luxury brands need to focus on recreating the high-touch, hyper-personalized experience customers receive in-store, in the d-to-c channel, and deploy those experiences across borders to meet demand at its point of origin,” Avillez Oliveira noted.
Authors of the ESW report said that in 2020, the luxury market was forced “to reprioritize digital strategies to offset the impact of the pandemic, resulting in a paradigm shift with online luxury sales predicted to increase to 30 percent in 2021, up from 22 percent in 2020 — a boost that is being driven by Millennial and Gen Z shoppers,” the company said.
Digging deeper into the findings, the report showed that 42 percent of luxury shoppers “still prefer to shop in-store, where they can touch and try on products” while even more shoppers, 43 percent, “say they are happy to forgo the in-store luxury experience for online convenience.” Forty-two percent of respondents said they will “make those purchases from brand websites outside their home country.”
In fact, 54 percent of shoppers in Mexico and 61 percent of respondents in China said “they are comfortable buying luxury products online due to the lack of availability and variety of such goods locally.” There were similar sentiments for consumers in Russia and South Africa. Respondents also said a more elevated online shopping experience was essential.
“When purchasing luxury products online, 77 percent of survey respondents said they expect exceptional personalized customer service with 75 percent indicating brands and retailers could do more to improve the premium levels of customer service for such purchases,” authors of the report said, adding that 69 percent of respondents said “they are more likely to buy luxury goods online if the online experience mirrors the level of service received in-store.”
Subsequently, ESW recommends that luxury brands need to focus on delivering unified commerce “and omnichannel strategies that give equal importance to all consumer touchpoints, merging the digital and physical worlds to create innovative retail experiences coupled with the seamless service consumers expect when making super-premium product purchases.”
Avillez Oliveira said the luxury brands that embrace omnichannel strategies “that meld the expectations of the modern consumer with the traditional tenets of the luxury experience…are the brands that will thrive as they bridge the perceived divide between online and in-store and win the loyalty of the next generation of luxury shoppers.”
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